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Friday, September 10, 2010

THE ROLE OF THE STATE IN THE SOCIO-ECONOMIC SECTORS OF THE USA AND OTHER RICH DEMOCRATIC COUNTRIES

Today's Buggy Topic Compares

 . . . the USA with other rich democratic countries in Europe, the English-speaking world, and Asia (meaning Japan), on a highly politicized topic: the degree of social spending across these countries, both by government and the private sector.

The OECD --- the Organization of Economic Cooperation and Development, a group of the highly industrialized countries (plus Mexico and Turkey) --- provides the comparative data.  It defines social spending this way:

Old age pensions, survivors transfers and pensions, and incapacity related benefits. Then, too, health, family, and active-labor market programs, along with unemployment, subsidies for housing, and “other social policy areas.

The data, the grouping of countries by means of government spending, then the addition of private social spending --- which takes into account deductions on income tax and produces a much higher ranking of the USA on net public and private spending --- are set out with the link to the appropriate data-sources of the OECD here  at Economist's View in two buggy posts. 

A Second Key Topic Briefly Tackled As Well 

Against this background, the main question is why the English-speaking countries, and especially the USA,have a much more limited state-role than is the case on the Continent of Europe.  Several historical reasons, only briefly sketched in --- not least, because prof bug has set out and analyzed those reasons in earlier posts --- provide the multiple causal explanation for that pivotal difference in the rich industrial countries.